A Firm Has a Market Value Equal to Its Book

question 19

Multiple Choice

A firm has a market value equal to its book value. Currently,the firm has excess cash of $800 and other assets of $5,200. Equity is worth $6,000. The firm has 600 shares of stock outstanding and net income of $700. The firm has decided to spend all of its excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed?

• A) 480 shares
• B) 500 shares
• C) 520 shares
• D) 540 shares
• E) 560 shares

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Definitions:

Visual Information

Information that is perceived through the sense of sight and processed by the visual system.

Interpretation

The process of explaining the meaning of something or understanding something in a specific way.

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